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Kevin Brady’s misleading Wall St. Journal op-ed

by Linda Beale

Kevin Brady’s misleading Wall St. Journal op-ed

Today’s Wall Street Journal (May 6) features an op-ed by Kevin Brady, right-wing Texas Republican who chairs the notorious “Joint Economic Committee” that has been a notorious producer of anti-tax propaganda-driven studies over the years of Republican hegemony in the House. See “Tax Reform Needs Accurate Tax Tables”, Wall Street Journal (May 6, 2013), at A15.

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Jeb Bush Says Mitt Romney’s Taxes Are Incredibly High. We Should Elect Bush President in 2016 So That He Can Rectify That.

President Obama won a second term in the White House in part by “dividing the country,” former Florida governor Jeb Bush (R) said in an interview that aired on Sunday morning.

“I think the basic part of his campaign was that those that were successful weren’t paying their fair share, even though we have incredibly high taxes for high income Americans,” Bush said on CBS News’ “Face The Nation.” “I think he ran a campaign of them and us. And it was quite effective, that somehow the Republicans don’t care about the large number of people.”

Bush said in order to win future elections, Republicans have to offer a “compelling alternative” to that narrative, which he said was untrue. The former governor said he sees such an alternative view taking shape.

Bush’s appearance on “Face The Nation” was part of a Sunday show blitz. The former governor, who is promoting a new book on immigration, is appeared [sic] on five Sunday news programs.

Jeb Bush: Obama won reelection by ‘dividing the country’, Sean Sullivan, Washington Post, yesterday

Well, last week’s big Jeb Bush news was all about the book he co-wrote last year with Clint Bolick, a five-star general in the rightwing-litigation wars during the past three decades.  The book is titled Immigration Wars.  In it, Bush, who, pre-Tea Party, had supported a yellow brick road to citizenship for illegal immigrants, reversed that position, making him look sort of like the Wizard of Oz.

This didn’t play well in the news media, or (I suspect) with much of the public, who thought that one Mitt Romney presidential campaign was more than enough, thank you very much.  

Not to worry, though.  Bush quickly explained that he and Bolick wrote that book last year, and, in light of the new recognition by the political right that, like defense spending cuts, this is not an issue worth losing national elections over, he’s changed his mind again.  Slightly. He’s once again okay with a path to citizenship, but only if that path doesn’t reward lawlessness.  By which he apparently was referring to crossing the border illegally and remaining here, not, say, mugging or murdering, although he probably doesn’t want to appear to be okay with those things, either. The path he now favors, at least as of yesterday, is shaped like a pretzel, I guess.  

The original, twisted ones, not the straight ones.  Similar to his own path on immigration issues. Rolled Gold and Snyder’s of Hanover might offer to lend him some sample molds.

As always for celebrity books, the publishing contract included a commitment to publicize the book.  Which undoubtedly sounded like a terrific idea not just to Bush’s publisher but also to Bush himself, back so many months ago.  Like last summer.  So instead of curling up with the Sunday comics on Sunday morning, as he surely would have preferred now that it’s the post-2012 election era, he made the Sunday talk show rounds.  (Actually, Bush might well have spent yesterday morning at home reading the comics; I didn’t watch the shows yesterday, but these days big-name folks pre-tape these interviews, I guess.)  

And, on at least one of those shows, Face the Nation, as the quote above shows, he claimed both that Obama falsely painted Romney’s 47% comment as indicating that somehow the Republicans don’t care about the large number of people, that Paul Ryan’s and Mitt Romney’s Ayn Rand budget proposals fooled people into thinking that somehow the Republicans don’t care about the large number of people, and that we have incredibly high taxes for high income Americans.  

Mitt and Ann Romney’s 13.9% tax rate indeed is incredibly high. And were it not for Obama’s outrageous dividing of the country, a majority of voters would have recognized that and voted for Romney because of his plan to cut income tax rates by 20% across the board.  Partly, of course, as a deficit-reduction technique, but also in order to be fairer to the wealthy–whose taxes would have been reduced hugely.

The election, of course, occurred before the Jan. 1 “fiscal cliff” deal that raised income tax rates on regular income above $450,000 for couples, and regular income above $400,000 for individuals, and that raised rates on investment income–capital gains, dividends, interest–from 15% to 20%.  So maybe Bush was just saying that taxes on the wealthy are now incredibly high, and that at the time of the election they were only very, very high.  As compared with, say, taxes on the wealthy throughout the seven decades before the presidency of his brother.  Including during the presidency and the vice presidency of his father.  And as compared to taxes on the wealthy in virtually every other modern capitalist democracy in the world.  And if you turn the charts and graphs upside-down, that’s clearly the case.

Except for Greece, whose hallmark fiscal policy was the ignoring of tax rates; everyone was entitled, apparently, to pick their own tax rate.  

Uh-oh.

Bush did say in that quote above that in order to win future elections, Republicans will have to offer a compelling alternative to the false narrative that a big problem for this country is spiraling income inequality (a.k.a., dividing the country) and that somehow the Republicans don’t care about the large number of people.  But luckily, he is offering one: We have incredibly high taxes for high income Americans.  

I think it’s going to be a winner!  Whew. Compelling.

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Post edited slightly for clarity after initial posting.

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Every State’s State/Local Tax System Taxes the Poor More than the Wealthy–And All Exceed Federal Taxes

by Kenneth Thomas

Every State’s State/Local Tax System Taxes the Poor More than the Wealthy–And All Exceed Federal Taxes

A new report from the Institute on Taxation and Economic Policy (ITEP) shows that in every state in the country, the bottom 20% of households pay more of their income in state and local taxes than does the top 1%. Washington state was the worst, where the bottom 20% pay a whopping 17.3% of their income in state and local taxes. This was followed by Florida at 13.5% and Illinois at 13.0%. Though the report hints at an exception, a reading of their appendix shows that the only one is the District of Columbia.
 
As the report points out, such high taxation increases the burden of poverty on the people who, by definition, can least afford it. Moreover, this runs counter to the federal tax system, which in its overall effect (see table below) is progressive. On average, the top 1% pay federal taxes equal to 30% of their income, compared to 1.1% for the lowest 20%.
 
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Source: Tax Policy Center

Between these two reports, we can see that the bottom 20% of taxpayers pays a much higher portion of their income in state and local taxes than they do in federal taxes. ITEP therefore recommends four major policies to make state and local taxation less regressive.

1) Enact a refundable earned income tax credit for state income tax;
2) Enact property tax circuit-breaker caps for all low-income taxpayers, including renters;
3) Enact other refundable income tax credits for childless households below the poverty level;
4) Enact or increase child tax credits, and make them refundable.

Of course, it should go without needing to be said, but to make federal tax more progressive (think of Mitt Romney and his tax rate below the average 15.1% paid by those in the third income quintile), we should tax capital gains and carried interest the same as ordinary income.

cross posted with Middle Class Political Economist

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